Gap Inc. Appoints New Old Navy CEO Amid Sales Slump

Gap Inc. appointed Michael Francis as the new CEO of Old Navy, effective November 2, after the brand experienced a 4% sales drop last quarter. The decline exceeded analyst expectations of a 2% dip and prompted the parent company to trim its 2026 net sales outlook and lower comparable sales forecasts for Old Navy, which generates over half of the company's revenue. Francis, a retail veteran with experience at Target Corp. and Walmart Inc., replaces Haio Barbeito, who is transitioning to an advisory role.

Despite the struggles at Old Navy and a 12% sales drop at Athleta, Gap Inc. raised its adjusted annual earnings per share forecast to a range of $2.35 to $2.45. This optimistic profit outlook is supported by $417 million in expected tariff refunds and strong performance from the namesake Gap brand, which saw a 10% comparable sales increase in the second quarter.

For the second quarter ended August 1, the company reported revenue of $3.65 billion, a 2% decrease that narrowly missed estimates, though adjusted profit of 52 cents per share beat expectations. Gap Inc. now projects fiscal 2026 sales growth between 1% and 1.5%, citing a balanced approach to consumer trends and risks related to energy prices and U.S. tariffs.